As the cost of installing residential photovoltaic panels to produce electricity goes down each year, American homeowners are increasingly seeing the green light for harnessing residential solar power.
The amount of solar energy connected to the electric grid has grown exponentially in the past several years, and there are now nearly 4 million American households that are already generating their own power with solar energy, according to the US Department of Energy.
There were 11,190 residential solar panel installation businesses in the United States as of 2022, an increase of 1.9% from 2021. As for the number of businesses connected to the solar power installation industry, California (75,328 businesses), Arizona (11,578 businesses) and Nevada (6,634 businesses) led the way.
The Solar Energy Industries Association (SEIA) trade group said it expects strong growth for the residential solar industry over the next five years, thanks in large part to renewable energy incentives and tax credits in the federal government’s Inflation Reduction Act.
Growth rates are expected to be in the low teens between 2024 and 2028, with installations tripling from their current level by 2029. Residential solar installations were expected to rise only 8% this year amid higher interest rates, however.
Does Residential Solar Make Sense?
With favorable sunshine conditions, a 5-kilowatt (kW) home solar system can generate over 7,500 kWh per year. At an electricity price of 20 cents per kWh, that’s equivalent to more than $1,500 in power bill savings in one year.
Photovoltaic panels can be an attractive investment for homeowners who:
- Pay high electricity prices
- Have roofs with good sun exposure
- Want to reduce their environmental impact
- Want to make an up-front investment in future energy use
Top-tier photovoltaic panels now come with a manufacturer’s warranty of up to 25 years, and the best solar installation companies will also offer a workmanship warranty. Such guarantees require well-trained employees, and lots of them to meet demand.
The average 8-kilowatt residential photovoltaic solar panel system cost about $3 per watt in 2022, according to data from the energy consulting firm Wood Mackenzie. That’s a drop of 29 cents per watt from the year before, but it still means the average system costs about $24,000 before tax credits and other incentives.
According to a survey by CBS News, 57% of Americans would install photovoltaic panels if companies offered a payback period of five years or less, and 55% of Americans say that they would be willing to purchase panels if they could recover the investment in five years.
Residential solar power installation is labor-intensive work, and businesses in the industry are more reliant on labor than capital. According to the US Department of Energy, the solar workforce will need to grow from approximately 250,000 workers in 2021 to between 500,000 and 1.5 million workers by 2035. These jobs should be accessible to workers from all backgrounds, provide competitive wages and benefits.
The US Department of Labor Bureau of Labor Statistics lists solar photovoltaic installer among the projected fastest-growing occupations between 2021 and 2031, with an expected growth rate of 27%.
According to the 2020 Solar Jobs Census, 67% of solar industry jobs are in installation and project development, and an additional 7% of jobs are in system operations and maintenance. Maintaining residential solar systems across decades of expected operation requires experienced technicians who can identify and address any safety or performance issues.
The market is heating up, and businesses are growing to meet demand.
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